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Tuesday, May 5, 2015

Hoteliers Big Challenge begets a No-Brainer Solution

Last year, on separate calls, a number of hoteliers, who happen to also be clients, shared with us a concern they all had in common, and taking their word for it, many more hoteliers share:

The persistent decrease in margins on their online channel.

One thing led to another as it often does, and before we knew it, a Challenge followed:

- Develop a solution that can help

ONE: Increase Direct Bookings on our hotel’s website,

TWO: Reduce commission payouts to OTAs in the process.

This challenge put us on fact-finding journey I thought was worth sharing, because my team and I learned some interesting facts about the hotel online booking business, facts many hoteliers I spoke with, have not known prior to our conversation. So here we go,

We learned the cup is half Empty:

A. OTA Commissions keep Rising

The hospitality industry is experiencing shrinking margins on the online channel, due to the persisting increase in OTA commissions.

B. OTAs are the 800Lbs Gorillas in the hospitality online booking space

Increasing dominance of the OTA’s in the online booking space, as a result of mergers, consolidations and steady increase in advertising spend:

With Rate Parity contingencies enforced by OTAs, prices on OTAs and Hotel websites should be identical. If that is the case, as demanded by OTAs, why do OTAs claim to offer “Lowest Price Guarantee‎”? and “Best Price Guarantee”? Because they feel they need to Bluff to convince online shoppers to choose them, a resellers, over buying from the source = the hotel website.

Next step was a No-Brainer:

We designed our solution, BookingDirection, providing online shoppers the price transparency they need to support their buying process, right on the hotel website, where buying decisions are being made, showing online shoppers the Hotel’s price, side-by-side with the OTAs prices.

We launched Q1 2015 and are busy helping hoteliers increase Direct Bookings on their websites. Due to the overwhelming demand and positive response, we have a small backlog. >>> Add your hotel to the implementation queue and we’ll get back to when your turn is up.